EUR/USD breaks below 1.30 again, major support at 1.2850, if we get a break below that, next target would be 1.2650 #forex #fx $$
A warning from Greek Prime Minister Lucas Papademos that Greece might not be able to sustain its position within the single currency mechanism unless there are deeper cuts in incomes again highlights the fragility of the whole Greek situation. Talks are due with the IMF, the ECB and the EU later in the month where top of the agenda will be calls for increased funding ahead of a what is now looking to be a disorderly default by Greece at the end of March.
France are testing investors confidence today with an €8bn 10 to 30 year bond auction this morning at 10.00hrs which again will be watched closely for any movements in borrowing costs for France and more importantly how it might affect France’s credit rating. Spanish Banks also under further pressure as they have to look to raise a further €50bn in provisions to cover bad property loans. All of the above continuing to put pressure on the single currency with EUR/JPY now hitting an eleven year low and EUR/USD breaching the $1.29 level again. As I mentioned yesterday sterling to make gains against the single currency (€1.2102 as I type) as long as EUR/USD remains volatile.
German retail sales figures released earlier showed the impact of concerns over the Eurozone’s debt crisis showing an unexpected fall in November, the second such fall in a couple of months but Germany will feel comfortable with its twenty year low unemployment rate and helping to support German consumer confidence.
Still very troubled times for the Eurozone and the single currency as the problems intensify with this morning’s fall in the Euro probably an overspill from Asian markets concerns for the Eurozone. Monetary policy remains the key issue for the Euro in the coming months and with the ECB likely to ease on monetary policy with rate cuts and further quantitative easing the single currency could be heading towards $1.25 The US also possibly could play their part in determining the future value of the Euro as the FED may have to fine tune US monetary policy later in the year with a potential third phase of “qe” to maintain economic growth momentum, which for the time being looks cautiously optimistic.
Sterling could be a surprise currency during the course of 2012 benefitting from the turmoil in Europe as could be the Yen and the Swiss Franc.
Markets in Switzerland seem to be getting “quite excited” about the President of the Swiss National Bank’s “art-dealer wife’s” foreign exchange transactions a couple of days ahead of the SNB’s actions on capping EUR/CHF. More on this one this afternoon’s press conference in Zurich at 15.00hrs. At least it makes a change from other issues. Good day to all on a stormy one, not just outside, but also in the markets
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